The increasing popularity of VOD is causing a significant escalation in demand. By analyzing the trends in supply and demand, we can observe the prosperity of Netflix and how it can surpass the opposing sources of VOD. The supply refers to the selection of videos on demand and these items are the main heart of this firm. The larger and more popular selection of videos they have, the higher the demand will be. Consumers want the most bang for their buck; Netflix has to keep up with these standards or their demand will decrease. A recommendation for Netflix would be to continue creating Netflix original content in order to decrease outsource spending, increase viewer content, and increase revenue from subscription pricing. To maintain customer
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Figure 2 provides a visual of the amount of subscribers for Netflix verse Hulu. Figure 3 shows that despite the price increase of 12.5% in 2015, the amount of subscribers still increased. The figures above are evidence that the price increase did not have a significant impact on consumer responsiveness. This concludes that the price elasticity of demand is not sensitive; meaning that the change in price did not affect the change in demand. The change in price does not affect the demand because the supply Netflix offers is highly competitive. There aren’t many firms that compete with the streaming videos that Netflix provides to its consumers. The price elasticity of demand impacts the firm’s pricing decisions and revenue growth because as they slowly increase subscription price, they gain significantly increasing revenue and options to increase their streaming content. When Netflix has the option to increase streaming content, they surpass their competition even further. When consumers look for a company to invest their money into, they look for a firm that will give them the most bang for their buck; in this field of business, it is clear based on the figures shown above that Netflix offers the most with a competitive
Figure 2 provides a visual of the amount of subscribers for Netflix verse Hulu. Figure 3 shows that despite the price increase of 12.5% in 2015, the amount of subscribers still increased. The figures above are evidence that the price increase did not have a significant impact on consumer responsiveness. This concludes that the price elasticity of demand is not sensitive; meaning that the change in price did not affect the change in demand. The change in price does not affect the demand because the supply Netflix offers is highly competitive. There aren’t many firms that compete with the streaming videos that Netflix provides to its consumers. The price elasticity of demand impacts the firm’s pricing decisions and revenue growth because as they slowly increase subscription price, they gain significantly increasing revenue and options to increase their streaming content. When Netflix has the option to increase streaming content, they surpass their competition even further. When consumers look for a company to invest their money into, they look for a firm that will give them the most bang for their buck; in this field of business, it is clear based on the figures shown above that Netflix offers the most with a competitive